MoD says troops are urged to take out private cover
Soldiers who tried to join the MoD's own life insurance and personal accident scheme in the past month have been told they cannot apply because of the likelihood of imminent action.
But MoD officials are now talking with alternative insurance firms to find a solution to the problem, which has caused outrage among service personnel.
"I think it's unfortunate. You have to remember that we have very generous provisions ourselves, through our two pension schemes, for looking after people who are either injured or killed, their families if they are killed," he said.
"This is a supplement, it's not a replacement for what we are doing anyway."
An MoD spokesman said that the refusal of one underwriter to back the scheme did not mean others would not be willing to cover the risk.
They were trying to restore cover as soon as possible, he said, but could not give a firm date until negotiations were complete.
'Hard line'
Only a third of the armed forces' 188,000 employees are currently members of the MoD scheme.
The scheme's underwriters had said they would not honour applications made after 21 September in light of the "current situation", the MoD said.
Earlier, an MoD spokeswoman said the decision was "a hard line to take".
But she added: "It is like standing at the top of a ski slope and only then deciding you might need accident insurance cover.
"We consistently advise members of the armed forces throughout the year to take out private life insurance cover.
"We encourage personnel, particularly those at high risk like the special forces, to take out cover - and they should have done so.
"We advise people to do it before the unlikely becomes the inevitable."
She added that troops injured or killed during military action would receive payouts from the non-contributory armed forces and war pension schemes.
'Duty'
The Sunday Telegraph quotes an unnamed senior officer as criticising the situation as "grossly unfair".
Paul Keetch, Liberal Democrat defence spokesman told the newspaper: "It seems to me that any organisation which is prepared to insure members of the armed forces in peacetime must understand that they face military conflict."
And Conservative MP Gerald Howard, a member of the Commons Defence Select Committee, said the government had a duty to protect the interests of soldiers on active service.